TRADE UPDATE #58

Export Focus on Point

07/02/2020

Last week Finance Minister Nirmala Sitharaman presented the union budget 2019-20 which was also dubbed as ‘budget of the decade’. From district-centered export hubs to NIRVIK scheme (high insurance cover, lower premium, simplification of claim settlement through a digital network), the minister announced a series of initiatives to boost exports originating from India.

Additionally, earlier this week, Reserve Bank of India (RBI) extended the loan restructuring scheme and announced CRR incentives for banks lending to small and medium businesses (MSMEs). The union budget and RBI’s latest announcements, together, are expected to not just revive exports but also help SME exporters add value in the global supply chain.

On the other hand, the coronavirus outbreak is likely to affect Indo-China trade as media reports suggest exporters trading in commodities like marine products, chili and cotton have already started to see the impact.


UNION BUDGET 2020

Budget 2020: More cash for exporters; ‘NIRVIK’ credit scheme, other moves to boost exports

To boost exports from India, Finance Minister Nirmala Sitharaman on 1st February announced a new export credit scheme – NIRVIK. Late refunds have been one of the major hurdles for exporters as they reduced the liquidity of exporters. To get rid of this problem, FM Sitharaman has proposed to start a digital refund of state and central taxes to exporters. Lower premium for small exporters has also been proposed in the new budget.


COMMODITY

Scrapping of anti-dumping duties on PTA will boost exports: Industry

The government’s decision to abolish anti-dumping duties on raw material for synthetic fibre-based clothing and certain plastic-based products will bring down their manufacturing cost and potentially boost exports, say manufacturers. The move, announced “in public interest” in the Budget on 1st February, does away with a previous NDA government decision to block countries like China, Taiwan, Malaysia, Indonesia, Iran, Korea and Thailand from substantially exporting the material -- purified terephthalic acid (PTA) -- to India.


BILATERAL TRADE

Coronavirus shadow over seafood exports to China

The dreaded coronavirus (nCoV) has started showing its impact on the seafood trade in the international market. Marine exports to China, in which some thousands of people were tested positive, have fallen. Andhra Pradesh is the largest seafood-producing state with 34% of the total production of 13.92 lakh tonnes, followed by Kerala (12%), Tamil Nadu (11%) and Gujarat (10%). AP is producing shrimp in about 51,776 hectares and is making efforts to increase the potential area.


POLICY

Commerce ministry preparing district export plan to boost shipments

The commerce ministry has initiated a process to prepare a district export plan specific to every state and Union Territory, with a view to boost the country’s outbound shipments, an official statement said on 4th February. The plan will include the support required by local industry in boosting their manufacturing and exports with impetus on supporting industry from the production stage to the exporting stage, the ministry said.


FINANCE

RBI measures for MSMEs to help growth revival in employment-oriented sectors: EEPC India

The news article states that the RBI measures through loan restructuring and providing CRR incentives to the banks to lend to MSMEs would certainly help the exporting sector. Reserve Bank of India measures to provide one - time restructuring window for advances to the MSMEs would help growth revival in the employment-oriented sectors, said EEPC India chairman Ravi Sehgal.


OTHER NEWS

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